This is now lower than the overall average rate they were suffering pre-raid.

In summary

You can reasonably argue that pension funds 'lost' £2 or £3 bn in 1997-98 compared to 1996-97 but in the meantime, they are 'winning' about £4 bn a year i.e. instead of paying overall rate 25% on their half of £160 bn, they are only paying 20% overall rate.

I'm not sure when the break-even year was, but all things considered, the losses and gains net off to a very small figure, nowhere near an overall loss of £100 bn and quite possibly a small overall gain. If you want the Excel formula, it is "=FA^0.5".

And of course, pension funds are not "the taxpayer". Everybody else is clearly miles ahead of the game as his overall indirect corporation tax bill is now 13% lower than eighteen years ago.

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I don't think it is cost. It is principle. Pensions are deferred pay. The deal is you don't pay tax on income and gains in a pension fund and you get tax relief on the contributions. Then when you get your pension you pay tax on the whole annuity as if it was pay. So it's really tax deferment. The question therefore is should all dividends received by Pension schemes not be subject to tax at all?

R, go on, run that by me again. I fucked off abroad after Thatcher got in and did not return until she was safely deposed. I have no idea what Lamont's pension grab was.

L, if we follow that principle to the n-th degree, then pension funds and other 'savers' should get a 100% tax credit on their net dividend income to compensate them for all the taxes suffered directly or indirectly by the companies in which they owned shares i.e. VAT, corporation tax etc etc.

By that token, the accrued 'pension grab' over the last eighteen years was in the order of £1 or £2 trillion.

But they are trying to compare the pre-97 rules with post-97 rules.

Which is what I did.

And applying a sensible comparison, they have probably just about broken even by now.

MW. Whoa. pensions defined as deferred income. As in wages or interest on capital. Implicit in that are all the other taxes paid throughout the supply chain. I am not at all arguing with your calculation. I am just saying that all non taxpayers including pension funds must therefore logically get 100% of the dividend.

MW. You know full well that I would ditch all taxes and subsides including alleged pension tax breaks in the blink of an eye. But, the agreed definition of pensions are deferred pay. Logically therefore you don't tax dividends paid to pension funds. Both Lament and Brown betrayed thus principle. Whether or not it has any fiscal disadvantage is immaterial. FWIW the vast majority of people are naturally thrifty, but after a century or so of cod keynesian brain washing they have rather got out of the habit. And socialism, obviously.